Online Copyright Infringement: Search for Solutions Continues

After the failures of Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), the Obama administration’s Internet Policy Task Force has recently put forward a new proposal to making it a felony to stream copyrighted works, along with a Green Paper and call for comments on the future of copyright law in the digital economy. Meanwhile, several studies have examined the impact of piracy on media industry with controversial results. This post reviews efforts to combat online copyright infringement in Europe and in the United States.

Norway’s Copyright Act Amendment

An amendment to Norway’s copyright law has recently provided copyright holders the power to obtain access to the internet addresses of infringers and to monitor the Internet Service Providers (ISPs) that host infringing materials, prompting comparisons to reincarnated SOPA. The previous law allowed only a single licensedcompany to have the permission to locate both website owners and end-users of unauthorized material online, but under the current law, copyright holders will be able to do so directly. When the website owner cannot be identified, the case may be decided without the presence of the defendant. Then, the ISP must follow the court order and block access to the website violating the copyright protection of the right-holder. Moreover, when a legal claim has been submitted, the amendment provides an exemption from the privacy protections of the Electronic Communication Act, which means that the ISP is not obligated to protect the confidentiality of the suspected user’s electronic account.

Motivation for enforcement measures

Norway’s amendment was triggered by attempts by the International Federation of the Phonographic Industry (IFPI) and media companies to block access to The Pirate Bay, world’s largest file-sharing site. In 2009, Norway’s largest ISP, Telenor, refused to proceed with the request, citing no legal precedent, and a court ruling confirmed that Telenor was not obligated block access to infringing sites. The recent amendment was designed to give more power to rights holders and trade groups.

The Pirate Bay was created in Sweden in 2003, where its founders were found guilty of copyright infringement and sentenced to prison time and fines in 2009. But the site has relocated to Iceland, and numerous proxy servers continue to operate around the world.

Other countries’ attempts to combat online piracy

In the United Kingdom, when the British Phonographic Industry (BPI) sought to block access to The Pirate Bay, the ISPs simply refused to do so. Later on, the United Kingdom’s High Court ruled that The Pirate Bay must be blocked by all local ISPs. Recently, the High Court expanded the ruling to block 21 allegedly infringing sites, in effect on October 30, 2013.

Commentators question whether such orders act merely as a public statement to discourage users, but are easily circumvented by those determined to do so. Nonetheless, a successful case by English Premier League against a sport streaming website in August demonstrated that court orders may be effective tools for blocking ISP access to infringing sites abroad. Court orders requiring major ISPs to block access to The Pirate Bay have also been used in several other countries.

In France, a “three strike piracy law” was approved at the end of 2009.Under the law, a new agency was to be created to issue termination notices to ISPs with authority to cut off the internet connection to the rogue websites. However, before its fourth anniversary the law was recently amended by official decree in response to widespread criticism of the harsh penalties. Now, fines will be the only sanction the infringers will face. The investigating commission also recommended a “culture tax” on content devices – such as smartphones, tablets, and TV sets – to make up for declining home media and ticket sales.

U.S. efforts to combat online infringement

In the U.S., a new, privately-implemented Copyright Alert System rolled out in February 2013. Under the CAS, users will be sent a maximum of six alerts. The first two will have an educational purpose, the two afterward would manifest acknowledgment, and the last two, called mitigation alerts, would actually lead to certain acts by the ISPs. Fortunately for the end user, the mentioned acts would not cause an internet deactivation, but only a temporary reduction of Internet speed and redirection to a landing page with educational information and a chance to review and respond to the notice.

Based on the Torrent Freak’s research on The Pirate Bay’s traffic from February 2012 to July 2013, the Copyright Alert System has not been effective in reducing file sharing. The statistic shows that the traffic has been increased for the 5 month period after the start functioning date of CAS.

Electronic Frontier Foundation raised a concern that CAS warnings will harm open wireless access in libraries and cafes because CAS process warns users to “ensure their wireless connection is password protected.” In addition, EFF argues the mitigation system will only bring a dose of needless interruption to everyday internet activity by slowing down internet speeds to 256kb/s for 48 hours based on mere allegations of copyright infringement.

Is the closure of file-sharing websites going to lead to actual benefits for the copyright owners?

In 2012, the file-sharing powerhouse Megaupload was raided by the FBI and its management arrested. FBI charged the members with engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and two substantive counts of criminal copyright infringement.

However, a European study showed that the website’s closing would not have a positive outcome over the movie revenues. The study, conducted by researchers at Ludwig Maximilians University Munich and Copenhagen Business School, looked at weekly data from 10,272 movies in 50 countries. The study showed that box office revenues of a majority of movies did not increase. The researchers believe that: “This is due to social network effects, where online piracy acts as a mechanism to spread information about a good from consumers with low willingness to pay to consumers with high willingness to pay.”

On the other side, the Motion Picture of Association of America strongly disagreed with the provided European study, by claiming that the “hurt” would be associated with the picture revenues, but not with films that sustain exceptional and widespread popularity and have a potential of enormous sales. MPAA cited a study by Carnegie Mellon University researchers that found increased sales after Megaupload’s shutdown in countries where Megaupload was popular. The MPAA spokesperson stated that different researches using different methods may reach different results and dismissed the Munich and Copenhagen study as“total speculation.”

Meanwhile, Norway researchers have found that illegal downloads have fallen by more than 80 per cent in the past four years simply due to increase in legal alternatives. Thus, increased access to licensed content may prove to be as important in combating piracy as copyright enforcement measures.